I spoke recently at the Kishor conference to Women Professionals on Raising Capital.  I really enjoyed the challenge of preparing for the talk as the subject was a business term not often used when working in the nonprofit sector.

When priming the presentation for the expected for-profit audience, I was surprised – though in retrospect I shouldn’t have been – by how much holds true when raising funds for either a nonprofit organization or a for-profit venture.

Moreover, after going over the slides I was amazed how easily I could replace “investor” with “donor” in most of the examples.  The fact that the session was attended by professionals from both sectors reinforced this belief.

(The most notable exception to the above is the definition of traction, which is not shared by for-profit and not-for-profit companies.)

Upon further analysis, I was able to gleam three live-or-die principles that span the charitable and capitalist sectors.  What follows are my presentation slides and these three takeaways.

CREATE A GOOD BUSINESS

When discussing how to raise capital in his book The Art of the Start, Guy Kawasaki quotes Arthur Rock, founder of Intel:

At a presentation I gave recently, the audience’s questions were all along the same lines: “How do I get in touch with venture capitalists?” “What percentage of the equity do I have to give them?” No one asked me how to build a business!

The success of every social and for-profit venture stems from the above quote — are you building a good business?  Questions that can steer a potential entrepreneur to the right path include:

• Are you building something worthwhile?
• Are you providing a worthwhile service? Is your product based on user’s needs or on your own?  Are you contributing to making the world a better place?
• If the answer to these questions is yes then the other building blocks must also be in place.
• What is the goal/purpose of the initiative?
• How will success be judged/measured?
• Is there a revenue model in place? (And yes, this is relevant for nonprofits, as well.)
• Have the right people been recruited to bring the project to fruition?

HONESTY TRULY IS THE BEST POLICY

Whether to donors, investors, oversight bodies, or to itself, organizations must maintain and promote honesty.  If you still doubt your mother’s advice, here’s another three that might convince you that honesty truly is the best policy:

• People interesting in supporting the project have been around and have heard most of the lies out there.  Don’t ever fool yourself into thinking you’ve found a “new” one.
• Never try to cover up lack of experience: all the great companies and entrepreneurs started at zero, just like you.
• By facing the tough questions, organizations can make the brave decisions to evolve and improve.

PURPOSEFUL DECISION MAKING

Ideas are easy to come by, but it’s the implementation that is difficult.

• Purposeful decision making is what gives tangible direction to intangible ideas.
• Additionally, donors, and the even government will have questions about decisions that a corporation has taken. When actions are deliberate, explaining oneself isn’t merely a chore but a chance to convert doubters into evangelists.
• With so many paths to choose — whether in marketing, raising funds, adopting technology, and a million other things  – intention and forethought allows us to navigate the myriad of choices available.

Incorporate these three principles and you have  the ingredients for making Guy Kawasaki’s words come true:

If you do succeed in building a business, either investors will be fighting to give you money or you won’t need their money.  Both are good problems to have.

Tizku Lemitzvot,

Shuey

Photo Credit:”Pile of Money” by Jody Klopp

Links to the articles I’ve reviewed and posted to Twitter between May 23 – May 29, 2011.  This week’s topics include:  Israel & Jewish  •  Starting a Nonprofit  •  Governance & Strategy  •  Fundraising & Marketing  •  Social Media & Internet  •  Resources

You can stay up-to-date with these articles and more by following me on Twitter or subscribing to receive The Nonprofit Banker by email.

Tizku Lemitzvot,

Shuey
@nonprofitbanker

ISRAEL & JEWISH

View newly ratified Code of Ethics of Israel Assn of Prof. Fundraisers (a.k.a. IAPFIsrael). We’re joining the big boys! via eJPhil

Nicely put >> eJPhil: Professional Fundraising in Israel Comes of Age http://ow.ly/1t7N1J

Interesting analysis on the changing nature of Jewish global giving, by Stephen Donshik http://ow.ly/52Zgb on eJPhil

STARTING A NONPROFIT

Nonprofitlawyer: How to Answer the Call to Charity w/o Starting a Nonprofit, on FCAtlanta http://ow.ly/55xEI

Wow, recommendations how lawyers can actually be helpful! >> Alternatives to Forming a Nonprofit Org in the USA, by GTak & Nonprofitlawyer http://ow.ly/55xH5

STRATEGY & GOVERNANCE

Charitylawyer: Quick Tips for Setting Nonprofit Executive Compensation http://ow.ly/1t9ebI

On the money! HildyGottlieb: My faves: 3, 4 & 5 >> Charitylawyer: 6 Smart Moves Great Board Chairs Make http://ow.ly/1tcMzX

Can Glee teach us how to be better Board Members for our nonprofit orgs? by GTak http://ow.ly/55cx3

FUNDRAISING & MARKETING

Vital >> Sharing Donor Lists: Can U Trust a Fundraising Consultant? by Stephen Donshik http://ow.ly/1tj057 on eJPhil

How connecting your nonprofit & the donor to the community can increase fundraising http://ow.ly/52Zym

Planning your next fundraiser? “Why You Should Ditch Your Next Event” by GailPerrync http://ow.ly/530jH

NonProfitBanker: Is Paypal the Best Option for International Fundraising http://ow.ly/1tdwrk

FundraisingNews: Do Your Donors Call You? http://ow.ly/1te4Yf

SOCIAL MEDIA & INTERNET

Is this 1st step to universal/concrete social media measurement? >> Measuring Online Engagement: A Beginning, by Askdebra http://ow.ly/1t7Nhm

Should your nonprofit think about starting a blog? (lots of good resource links) in Wild Apricot http://ow.ly/1thTty

Case study >> Making the Most of Facebook Groups: NATAL, by Askdebra http://ow.ly/1tj0B0

RESOURCES

FundraisingNews: Reading list: Great books for nonprofit marketing sector, by KatyaN4G http://ow.ly/1t9ec2